The American used light vehicle market is beginning to show signs of recovery after positive GDP growth and a growing source of credit that is relatively cheap and easily available at around 4%. As a result, retail leasing is growing at record levels – 28% in 2012 – and there is potential for further growth in 2013.

In 2012 there were 40.5 million used light vehicles sold retail in the US, which was up +5% from 2011, further reinforcing that the market is getting back to where it was prior to the recession in the late nineties. Out of those 40.5 million vehicle sales, approximately one third are sold privately, one third by independent dealers, and one third by franchised dealers.

Additionally, within the US automotive market, roughly 21 million light vehicles were sold wholesale, essentially unchanged from the prior year. Within this market, 7.9 million units were sold at NAAA member auctions (up +3.3% from 2011), reflecting the strengthening economy and growing new car market, which resulted in increased dealer consignments to auctions.  

From an online perspective, America was a leader in the development of online used vehicle remarketing, beginning in the early nineties. This was due in part to the country’s high level of IT expertise, and because the size of the country meant visiting physical auctions was often a time-consuming and costly exercise for buyers.

Twenty years after online used vehicle auctions launched in the US, while physical auctions still comprise about half of all used wholesale transactions in the light vehicle market, online wholesale transactions have grown to just under 20% of used vehicles sold. This includes "online only" and "Simulcast/Hybrid" wholesale auctions, with the "online only" showing the strongest growth, up from 1.4% to 4.4% of wholesale units by 2012 (triple the 2008 level). This trend is expected to continue as asset owners experiment with various forms of online remarketing to improve efficiency and speed while reducing transport costs.

More corporate fleets, including rental agencies, commercial accounts and leasing companies, are currently experimenting with upstream remarketing as they aim to proactively remarket their assets prior to reaching the end of their planned time in service.

A preferred process for commercial fleets and leasing companies is to contact the employee or driver online three months prior to the vehicle’s lease maturity date, based on their specific knowledge of the vehicle’s actual condition. If the employee or driver elects not to purchase this vehicle, it is then offered to other employees within two to three months of the vehicle’s maturity date. If, after this process, no purchaser has bought the vehicle, it is then sent to the nearest physical auction.

‘There is a growing trend in the US whereby large institutional consignors (eg auto companies, banks, fleets, etc) are adopting multi-channel remarketing strategies in order to maximise realised sales values while simultaneously reducing their days to sell and overall remarketing costs. Different vehicles get remarketed in different ways, but upstream selling seems to be the way forward,’ said Dick Dennis, Autorola USA country manager.

‘Not only do vehicles get sold much faster, and the asset owner receives payment earlier in the process, but overall remarketing costs are considerably less when factoring in transportation, inspections, document processing costs, etc,’ said Dennis.

Like so many other European countries, the French new car market is depressed and the number of used cars coming into the market has reduced due to contract extensions and the fall in new car sales three years ago.

Consumer car buyers are more cautious and holding onto cars for longer, while trade buyers are looking to source stock in smaller numbers to ensure they aren’t left with expensive inventories sitting idle on their forecourts.

The aggressive new car offers on the market are also deterring used car buyers from looking at nearly new vehicles which is proving a challenge for daily rental companies.

Where the market is holding up is with three and four year old ex-contract hire cars that are coming through in sensible numbers, so prices and demand are remaining constant. That’s good news for the four main leasing suppliers that make up the majority of the French contract hire market.

Autorola is seeing more cross border business with around 70% of its volumes being bought through its online platform in France and then exported into other countries, particularly eastern Europe. A car purchased in France could be bought, transported and for sale in Poland in just over a week, so more cross border buyers are turning to France for the speed and convenience of sourcing used stock.

Eastern European countries are usually happy to take the older or higher mileage stock that can sometimes prove difficult to shift in a home market. This is helping the French market retain some stability, although the last few months could see the markets change again. Traders stocked up on vehicles in August and September and unless they find buyers for that stock quickly, demand could falter for the remainder of 2012.

One leasing company’s online remarketing strategy is to only sell high mileage 120k+ cars through this channel – one that is working very successfully. Another uses it to sell a mix of stock with a view to finding new buyers for its vehicles that wouldn’t normally visit a physical auction. They have been rewarded with uplifts in prices in the region of €500, which makes online a very viable part of their remarketing strategy.

Online continues to grow in France with Autorola leading the way.

“We will have increased our buyer base over the past year by 35% which vendors have responded positively to,” said Pierre-Emmanuel Beau, managing director of Autorola France.

“More vendors are using our online platform to sell stock and more traders are buying online, which shows the growth in this remarketing channel.”

Like so many other European countries, it’s too early to tell where the car market will go in early 2013, but supply and demand is at a level where there aren’t vast stock issues forecast.